A former Swiss banker should get a sharply reduced prison term for helping the U.S. government as a star witness in a wide-ranging tax evasion investigation of banking giant UBS AG, federal prosecutors said Tuesday.
The motion filed in federal court comes a week after U.S. and Swiss governments settled out of court to end an IRS lawsuit against UBS. Under that deal, the Swiss agreed to let UBS name at least some wealthy U.S. clients behind 52,000 accounts, information that had been protected by the country's vaunted bank secrecy laws.
Assistant U.S. Attorney Jeffrey A. Neiman said in the motion that Bradley Birkenfeld, 43, had provided extensive cooperation. Because of that, he deserved no more than 2 1/2 years in federal prison, or half the five-year maximum for his guilty plea on a charge of conspiring to defraud the U.S.
Birkenfeld provided key information not only to U.S. prosecutors but also to foreign authorities investigating UBS, the Securities and Exchange Commission, the Internal Revenue Service and a U.S. Senate panel.
"This substantial assistance has been timely, significant, useful, truthful, complete and reliable," Neiman said in the motion.
An attorney for Birkenfeld did not immediately respond Tuesday to a request for comment.
Birkenfeld, a UBS private banker who handled wealthy American clients from 2001 through 2006, pleaded guilty in June 2008 to a single count of conspiracy to defraud the U.S. A federal judge in Fort Lauderdale, Fla., is scheduled to sentence Birkenfeld on Friday, even though prosecutors and Birkenfeld's defense attorney had asked for a delay.
Since his plea, Birkenfeld has been instrumental in U.S. efforts to obtain names of suspected tax cheaters from UBS and in a criminal indictment against UBS executive Raoul Weil, a fugitive living in Switzerland whose lawyer insists is innocent. So far, four former UBS clients have pleaded guilty to U.S. tax charges, with more indictments expected across the country.
Prosecutors said Tuesday more than 150 Americans are being investigated criminally for concealing income and assets at UBS, resulting from a February deferred prosecution agreement in which the bank turned over hundreds of client names and paid a $780 million penalty.
The U.S. and Swiss governments are expected as soon as Wednesday to reveal details of the hard-fought settlement from last week in a broader attempt by the IRS to force UBS to disclose thousands of additional names of American clients believed to be hiding billions of dollars in assets in secret accounts.
A statement signed by Birkenfeld describes how he and other UBS bankers solicited clients by hobnobbing with the rich at events such as Miami's Art Basel festival, of which UBS is a major sponsor. Birkenfeld disclosed how UBS trained bankers to conceal their true mission in the U.S. by lying on customs forms, claiming they were traveling on pleasure rather than advising clients on wealth concealment tactics.
Among the details divulged by Birkenfeld: Once, he bought diamonds using a U.S. client's money and smuggled them to America in a tube of toothpaste.